All eyes on SALCON, however, let’s compare with its peer

Edge covered Salcon this week’s issue as its profit surged from RM8.8Million to RM22Milion year-to-year. Which is over nearly 300%. It’s share price surged to the high of 73 cents this morning.

健忘 has previously covered on the SALCON 2009 Quarter 4 result, so i will not repeat it again.
However, in order to appreciate the true value of SALCON, why not we take a look on its peer listed in Singapore Exchange for come comparison. From there, we will know how well SALCON is performing compared to its regional peer.

To my knowledge, there are currently two main company in SGX in water treatment. HYFLUX WATER TRUST & EPURE. I’m not going to go into detail from Hyflux Water Trust, as it’s result are not so appearing to me. Epure is on of the China’s company listed in SGX, for KLSE, we called it red chip, in SGX they called it S-Chip.

As some of the background, in 2007, Epure was named one of the 10 Most Influential Water Companies in China and the Top 10 EPC Companies in China’s water industry.

All the while, people are having a concept where normally good China companies would probably listed in Hong Kong and Singapore, only those that not top of the line ….will come to Malaysia.

In 2009, Epure PAT stand at RMB280 Million (RM140M, around 7 times of SALCON 2009’s profit) versus RMB203 Million (RM100M) in 2008, which translate to over 38% of PAT growth per annual.

2009 EPS stands at RMB 0.213 (S$0.0436), currently its share price stays at S$0.89, which is equivalent to 20xPE. However, do bear in mind that the tolerance level of PE might be different from market to market.
Let’s that a quick peek on how does CIMB rate this counter.

Based on its Q4FY09 result, CIMB rated it a Outperform with target price of S$1.33 (current price at S$0.88-0.89).
This is how it’s quoted on its outlook:
Positive outlook. The Marafiq deal should open the door for Epure to tap immense
demand for water and wastewater treatment services in the Middle East and Asia.
Apart from water treatment, we believe there is growth potential in water recycling
i.e. selling recycled water to industrial users surrounding plants. Utilisation would
depend on the speed of infrastructure development in the vicinity. Epure has high
earnings visibility and a solid track record in sustaining its margins, in our opinion.

Edge Singapore also features this counter before (with a buy call) and if my memory served me well, the share price are not yet factor in the effect from its dual listing (dual listing in Hong Kong this year).
With the buy in price of S$0.90 cents, it still have an upside of 47% (till S$1.33).

The most attractive is the conversion rate, imagine that every 1k that you earned in SGD, is equivalent to 2.5k in RM. Once of the purpose of my investment, multiple folds on my capital.
I completed its detail evaluation of EPURE, share it next time.
Cheers and happy investing!

Salcon，2009Q4与全年表现检视~下篇

让我们再看看，水务股当中，Salcon的PE是否过高？

而其他参与水务的企业，是否远比Salcon好呢？

以下大马股市中水务股的对比，不过，请留意，有些企业的主要业务是建筑和产业，水务只是其中一环，健忘为了不想错过，都放进去了。

Company	09 EPS	Q EPS	NTA	Quarter	Current Price	PER	P/NTA
Salcon	0.0471	0.0112	0.66	4	0.66	14.01	1.00
Jaks	-0.0154	-0.7100	1.04	4	0.74	0.00	0.71
PBA	0.0447	0.0059	1.90	4	0.88	19.69	0.46
YIL	0.0145	0.0055	1.98	3	0.73	50.34	0.37
Puncak	0.3485	0.0096	3.60	4	2.68	7.69	0.74
Loh&Loh	0.4049	0.1408	3.22	4	4.96	12.25	1.54
KPS	0.0518	0.0119	1.02	4	1.38	26.64	1.35
Gamuda	0.0624	0.0298	1.50	2	2.77	44.39	1.85
PICORP	0.0155	0.0003	0.13	4	0.275	17.74	2.12
Goldis	0.0700	0.0253	2.34	3	1.21	17.29	0.52
Taliwrk	0.1033	0.0327	1.00	4	1.37	13.26	1.37
PJBumi	0.0219	-0.0368	0.50	4	0.35	15.98	0.70
Weida	0.1099	0.0471	1.13	3	0.70	6.37	0.62

平均PER值在19.94，其实如果拿掉Gamuda和Loh&Loh，平均PER值则是18.26，这样看来，Salcon的PER14，还有向前的空间。

从以上的企业来看，目前Puncak和Weida似乎在被低估行列之中， YLI却过重，Salcon在整体中排行第五强，算是水务股中一个不错的选择。

希望健忘没忽略掉任何其他水务企业，如果有的话，还请股友们提醒与赐教。

关于NTA，以及以上的Price to NTA，基本上只是作为参考而已，因为对健忘来说，NTA没办法有效地反映公司的竞争能力，股价与之对比，错误指引的几率很高。

好了，让我们看看新加坡的水务股，又是什么程度呢？

Company	09 EPS	Q EPS	NTA	Quarter	Current Price	PER	P/NTA
Epure	0.0328	0.0162	0.229	3	0.805	24.54	3.51
U.E	0.05496	0.02856	0.368	3	0.280	5.09	0.76
Hyflux.Water	0.04008	0.0048	1.680	4	0.700	17.47	0.42

目前，新加坡的水务股，看起来PER也挺高的，而以目前的价格来理解，Salcon的PER依然合理。

这样子算到最后，我们再重温一遍Salcon的合理价格，如下，

MV	AEPS
10	0.47
12	0.57
15	0.71
18	0.85
20	0.94

假设水务股平均PER值是18的话，那么， 其实Salcon还能再向前进发，0.85的股价，不是梦。

可能吗？

健忘，如果有多余的钱放在银行干耗，倒不如一试。

只是，下个季度非常关键，我们到时就可以看清楚，Salcon还能否走得更远了。